If you are an Rx regional sales director or a product marketing manager, I have a somewhat provocative question for you:  How exactly are you planning your 2014 Medicaid strategy?

I ask this because as you look over the Medicaid landscape for next year, there is more than a little uncertainty at hand.  With Medicaid about to become the basic health care delivery mechanism of the 2010 Affordable Care Act, otherwise known as Obamacare, you would think this might be a simple matter of reviewing the new federal law for guidance. But if that’s the approach you are taking for your 2014 Medicaid planning, let me be the first to tell you, you are going down the wrong path.

Obamacare is premised on the idea that federal government and state governments will cooperate in the delivery of healthcare to an estimated 40 million new Medicaid patients starting on January 1, 2014, with sign up for these new services scheduled to begin on October 1, 2013.

That is all well and good, so far as a reading of the law goes.  But when you begin to dig into how the states are actually implementing Obamacare, you soon realize the launch of this new law is not going as smoothly as the framers of the measure had hoped.

As of this writing, and according to the Kaiser Family Foundation, there are 26 states that have said absolutely “no” to state exchanges envisioned by Obamacare and are defaulting to a federal exchange; 7 that have said “no” to parts of Obamacare and have negotiated “Partnership Exchanges” with HHS; and only 18 that have declared they will establish state-based exchanges, and cooperate with new law.

If Kaiser is correct in these assessments and given the current US population of about 313 million, this means that approximately 56% (177 million) of Americans live in states that have said effectively said “no” to Obamacare; 10% (32 million) live in states that have rejected parts of Obamacare; and only 33% (104 million) live in states that will have access to Obamacare’s state exchange offerings.

If these statistics startle you, they should.  Thinking about your 2014 “numbers,” how will you manage this situation nationally?  In particular, what will happen in those states that are “defaulting to the federal exchange?”  Here are two key examples you may want to focus on for your answers.

Florida

Florida’s current population is about 19 million.  Right now, 3.3 million Floridians (approx. 17% of the state) are enrolled in FL Medicaid.  It’s estimated that another 1.3 million Medicaid recipients will be added to Florida’s Medicaid rolls once Obamacare is implemented.  This creates a potential situation in which nearly 25% of Florida’s total population is scheduled to be receiving Medicaid Rx care after January 1.  Any Rx sales manager or product marketer who is responsible for the State of Florida has to take notice of these numbers.

So how is the implementation of Obamacare going in Florida?

This past winter, Florida’s governor, Rick Scott, a Republican, publicly broke ranks with his Republican Governor Association colleagues, and announced that he was seeking a “deal” for Florida that would accept the essence of Obamacare, i.e., the federal financial support, while adopting a 100% federal provision of insurance services, all of which sunset and be reviewed after three years.

Seemed like a done deal. But when Gov. Scott took his concept to the Florida legislature, he encountered stubborn resistance from the Florida House of Representatives.  In the end, the governor gave up and the entire Obamacare package was shelved. Florida, it appears, will default to whatever the “federal exchange” may turn out to be.

So, how as a sales & marketing executive with responsibility for Florida do you plan your sales and/or marketing strategy in this huge, heavily Medicaid impacted state?  What drugs will be covered in the “federal exchange?” Will only one drug per category be covered, per the earlier recommendations of the Essential Health Benefits finding put out by HHS? How will you get your drug covered for Florida Medicaid in 2014? How will you get reimbursed? From the state or the feds? And at what rate? Right now, nobody knows the answers to any of these questions.

Let’s look at another important example that is being impacted by Obamacare: Texas.

Texas

Texas is now the number two most populous state in the nation with an estimated 2012 population of over 26 million. It’s also one of the fastest growing states in the nation.  Given all of this, I don’t think it would be an overstatement to suggest that every Rx sales and marketing director in the country wants a piece of Texas.

So let’s consider the impact of Obamacare’s implementation here. Currently, Texas Medicaid beneficiaries number approximately 5 million individuals, or about 20% of the population. An estimated 2.6 million beneficiaries could be added to the Texas Medicaid rolls under Obamacare. That would total 7.6 million people, or about 29% of the State of Texas population.

Unlike Florida, however, Texas has been a steadfast “no” in cooperating with the federal government on the implementation of Obamacare from the start. Therefore, Texas had no debate about setting up a state exchange for new Medicaid patients. Instead, like Florida, a new federal exchange is supposed to be put into operation for nearly 8 million Texans by January 1, 2014.  How this will be accomplished in Austin is unclear at this time.

Again, as regional sales directors or product managers for Texas, how do you plan on “making your numbers” in this huge market for 2014?

Planning Elements for Medicaid Sales & Marketing in 2014

I could go on from here with the specifics of each “no” state, but I think you get the picture.  Just Florida and Texas, alone, both among America’s most populous states, account for nearly 10% of the estimated 40 million total Medicaid expansion this new law is supposed drive come January 1, 2014.  These two states by themselves stand to generate massive Rx sales that will impact anyone’s national sales or product marketing plan.  However, both are essentially blank pages today in terms of how your products will be included on a formulary, what the reimbursement rates will be, who will pay you for their dispensing, and all the rest that goes into making money in a state Medicaid Rx program.

And the same is true for the other 24 “no” states. Nobody has answers. Overall, you are essentially in the dark as to how to plan for about 22 million new beneficiaries with drug coverage.

So how do you to manage your sales and marketing for Medicaid Rx patients in this 2014 environment?

First, you are going to need much better intelligence on what every state has decided to do with its Medicaid Rx program than you have ever had before.  Given 40 million new potential, paying customers, you would be foolish not to demand the best, most complete information available on each state.  If you don’t have that deep info, frankly, how can you establish sales and marketing goals for 2014?

Second, you will need to figure out how each state will actually administer Obamacare. Will it be by default to the federal exchange; the negotiated “partnership exchanges;” or through separate state exchanges? And depending on which policy the state has chosen to follow, what will that mean to you? Every state will do it differently based on their medical culture, the state’s finances, and the level of cooperation medical providers offer in each state. Understanding all of these factors will be imperative.

Third, I would suggest this situation is anything but static (some states may quickly walk away from Obamacare after it starts; others may decide to join; still more could come up with entirely unexpected solutions for their populations).  You will want onsite staff in many of the major state capitols just to keep track of all of this. That could be expensive, but how else are you going to stay on top of all of these developments?

In short, sales and marketing execs are going to have to think way outside of the box in 2014 if they believe their Rx company will enjoy the financial benefits of Obamacare’s new Rx coverage.  And this is certainly not to say that the prospects for monetary gain don’t exist. They clearly do, but only if you can figure out how to convert on this Obamacare opportunity in each state.

All of this said, I believe this particular reimbursement opportunity will be unlike any other the US drug industry has ever faced. The reimbursement uncertainly, intrusive politics, and the shear market chaos that is likely to result will be challenging. But it’s also equally clear that if you stand around, waiting to see “how things develop” under Obamacare, you run the risk of substantial Rx sales and marketing losses for 2014, and beyond.

The choice is clear. You have to engage, come what may. So, what’s your Medicaid Sales and Marketing plan look like for 2014?

Tom Norton is principal at NHD Smart Communications. He can be reached at tnorton@nhdcomm.com

On a panel titled “Activist FDA: Transformation Agent,” Prevision Policy founder and former Pink Sheet editorial head Cole Werble relayed the tale of Acadia Pharmaceuticals, a San Diego-based company with a stage three compound (pimavanserin) targeting Parkinson’s disease-related psychosis.

A month ago, Acadia met with FDA to discuss the proper design of a new phase III trial intended to confirm the results of a previous, 17-month study that met its primary endpoints. A confirmation trial was needed, Acadia presumed, since the first phase III trial of pimavanserin, conducted in 2009 at half the dose of the successful trial, had failed. Acadia had already begun to enroll patients in the confirmation trial – which represented an $18 million commitment – when it met with FDA in April to get the agency’s blessing.

To Acadia’s surprise, FDA responded that the additional confirmation trial wouldn’t be necessary, based on the pivotal phase III trial already on the books, combined with supportive data from other studies on pimavanserin. As a result, Acadia scrapped plans to do another trial, and began preparing its NDA posthaste. But the company wasn’t hasty enough, and investors dialing in to a call about the FDA meeting balked at the company’s projected filing date – near the end of 2014. Why not file immediately, they wanted to know? Acadia executives’ refrain in response, was, “these things take time.” FDA had reversed the waiting game, making Acadia itself responsible for the delay in review and commercialization of a new product.

This is just one example, of course; it isn’t likely that a big pharma looking to introduce another DPP4 into the market for type 2 diabetes, for example, would be told not to worry about additional trials studying cardiovascular or pancreatic side effects. But the fact remains that FDA approved 39 NDAs in 2012 – the most since 1997 – and the agency launched yet another expedited regulatory pathway – breakthrough therapies – at the beginning of 2013. The breakthrough therapies designation is likely to shorten the timeline from discovery to commercial approval – for those drugs receiving the designation – to between three and five years, according to IMS estimates.

Rachel Sherman, associate director of medical policy and director of the Office of Medical Policy, CDER, FDA

The timeline from discovery to approval could be as short as 26 months, said Rachel Sherman, FDA’s associate director of medical policy at the Center for Drug Evaluation and Research (CDER). Sherman said her office had received – to date – 39 requests for breakthrough therapy status, of which 12 have been granted and 14 denied, with 11 pending and two withdrawn. She said the breakthrough therapies program is already “an enormous success.”

Joseph Herring, CEO at Covance, noted that pharmaceutical companies are often difficult to work with, from his perspective as the head of a CRO. “[Investigators] want a perfect trial that can’t be enrolled.” He wondered about the interplay companies have with FDA regarding trial design discussions. In response, Sherman advised more communication. “If what we say doesn’t make sense, ask us. Argue with us. We’re receptive to it.”

How does a company know whether it’s sufficiently engaged with FDA? “If your lead clinical person is on a first name basis with the [respective] lead reviewer at FDA, you’re in good shape,” said Sherman. “If you’re not, you’re not.” Sherman cited the Clinical Trials Transformation Initiative as another program aimed at “identifying and promoting practices that will increase the quality and efficiency of clinical trials.”

“The point of all our programs is better evidence generation…we lack evidence,” said Sherman. “The most expensive drug is the one given to the wrong patient, or given incorrectly.”

On the subject of biosimilar approvals, Sherman said FDA hasn’t received a single application yet, adding that the phrase “follow-on biologics” is dead. The requirements for biosimilars, according to Sherman, are that a biosimilar be “highly similar” to the original product, with “no clinically meaningful differences.” Sherman said that does not mean “interchangeability,” though, suggesting that a biosimilar could not be substituted for a brand biologic at the pharmacy, without specific doctor’s orders.

Comparing the current activist FDA with the activism the agency demonstrated during the HIV epidemic, Werble said that in addition to the breakthrough therapies designation, FDA has also launched the GAIN ACT, and its anti-infective exclusivity provision; has opened up FDA meetings to rare disease outside consultants, who advise companies on efficient FDA regulatory navigation; and has implemented PDUFA 5’s “patient-focused drug development meetings,” which solicit patient opinions around specific diseases.

Speaking on the “agency-wide impact of management attention and staff commitment” mustered during the HIV crisis 20 years ago, Werble said the pendulum has once again swung back toward FDA activism. “That commitment [to HIV] was infectious 20 years ago, and it’s occurring again,” said Werble. He also noted that a solid one-third of all drug applications submitted to FDA now come from small companies, a rejection of the thesis that only big pharma is properly equipped to navigate FDA’s regulatory structure.

The Rutgers Business School Annual Healthcare Symposium, convened on April 30, was presided over by Mahmud Hassan, director of the Blanche and Irwin Lerner Center of the Study of Pharmaceutical Management Issues, at Rutgers. John Castellani, president and CEO of PhRMA, and Seyed Mortazavi, president of IMS Health US operations, also gave presentations.

By Susan Haigney.

Pharmaceutical Research and Manufacturers of America (PhRMA) International Vice-President Jay Taylor has expressed the organization’s concerns over the Office of the United States Trade Representative’s (USTR) 2013 Special 301 Report. The Special 301 Report, released in May 2013, is an annual review of the state of intellectual property (IP) rights protection and enforcement in trading partners around the world and reflects the US Administration’s resolve to maintain IP protection worldwide.

Expressing appreciation for USTR’s efforts to ensure IP protection, Taylor expressed dismay that an out-of-cycle review was not granted for India. “The deteriorating protections for patented medicines in India have become increasingly concerning,” Taylor said in a PhRMA blog. “Over the past year, the Government of India has issued several intellectual property decisions that have disproportionately impacted US biopharmaceutical companies and a number of other innovative sectors. The IP regime in India has been structured and applied in ways that prop up local industries to the detriment of US jobs and the worlds patients.”

According to the report, India remains on the Priority Watch List. And with regard to pharmaceuticals and patents, the administration states it has some concerns. “The United States is concerned that the recent decision by India’s Supreme Court with respect to India’s prohibition on patents for certain chemical forms absent a showing of ‘enhanced efficacy’ may have the effect of limiting the patentability of potentially beneficial innovations. Such innovations would include drugs with fewer side effects, decreased toxicity, or improved delivery systems. Moreover, the decision appears to confirm that India’s law creates a special, additional criterion for select technologies, like pharmaceuticals, which could preclude issuance of a patent even if the applicant demonstrates that the invention is new, involves an inventive step, and is capable of industrial application,” the report states.

Taylor also expressed PhRMA’s disappointment that Canada was moved to the Watch List for 2013. “While PhRMA appreciates the fact that USTR raises serious concerns regarding numerous Canadian pharmaceutical IP measures, we are nonetheless disappointed that USTR has changed Canada’s designation despite the fact that no progress has been made on this front. Canadian policies and judicial opinions continue to harm international innovators to the benefit of domestic industries. Canadian regulators have, for example, created a discriminatory right of appeal regime under which Canadian medicine manufacturers challenging the validity of a medicine patent may appeal an adverse decision through an administrative proceeding while innovative international biopharmaceutical companies cannot. We also are concerned that the heightened standard for patentable utility for pharmaceutical patents is inconsistent with Canada’s trade treaty obligations. USTR and the interagency process should push Canada to provide more adequate IP protections.”

The report does express concern regarding rights of appeal in Canada. “With respect to pharmaceuticals, the United States continues to have serious concerns about the availability of rights of appeal in Canada’s administrative process for reviewing regulatory approval of pharmaceutical products and also has serious concerns about the impact of the heightened utility requirements for patents that Canadian courts have been adopting recently.”

Taylor goes on to state support for USTR and the battle for IP protection. “The value of IP protection should not be undermined by discriminatory market access barriers, including discriminatory government pricing and reimbursement policies. We welcome USTR’s recognition of market access barriers faced by US pharmaceutical companies and their efforts to eliminate them in many countries in order to provide for affordable healthcare today and support the innovation that assures improved health care tomorrow.”

The full Special 301 Report, detailing positive and negative findings from countries all over the world, can be found here.

What do you think? Is the US doing enough to protect the IP rights of pharmaceutical companies in today’s international market?

The Food and Drug Administration appears likely to benefit from sequester-flexibility efforts due to its unanticipated effect on user fee revenues. In addition to FDA contending with the 7.8% reduction in funding for its appropriated funds, as with other federal agencies, the Office of Management and Budget (OMB) has determined that the budget reduction policy applies to user fees paid by manufacturers to support specific FDA approval and oversight functions. FDA thus is collecting all its authorized fees, including recently renewed fees on prescription drugs and the new levy on generic drug companies, but is unable to touch a good chunk of the money.

FDA commissioner Margaret Hamburg explained at the annual meeting of the Food and Drug Law Institute (FDLI) last week that the agency will lose about $209 million this year due to sequestration — $126 million in budget authority and $83 million in user fees. FDA will continue to collect the fees, but the sequestered amount will remain on deposit in the U.S. Treasury and cannot be used to support “critical tasks” such as issuing regulations and guidances, conducting inspections and speeding approvals of new drugs and biologics.

At a recent hearing by the House Appropriations subcommittee that oversees FDA’s budget, Rep. Sam Farr (D-Calif) and other Democrats raised the possibility that Congress will look to provide flexibility in applying the sequestration policy to FDA, especially for fees collected from the private sector.

In response to questions about the impact of the sequester, Hamburg told the panel that without full user fee revenues, “we obviously will fall behind” in meeting performance goals. The agency will be slow putting out guidances, reviewing applications, making new hires to support new programs, improving business processes to make regulatory pathways more efficient and developing new regulatory tools that could “make our system better able to handle more sophisticated products.”

The budget cut could mean fewer meetings between FDA review staff and sponsors of new drugs. FDA’s system for regulating drugs and medical products “works better,” Hamburg explained to the legislators, when reviewers can work closely with sponsors to determine what data is needed and what kinds of studies are important to do to support a new product. And fewer resources “will certainly limit the staff’s ability to engage in those activities,” she said.

Hamburg said at the FDLI meeting that having adequate resources is a “constant concern,” and that she is “enormously troubled that FDA’s responsibilities continue to outstrip available resources.”  And she told the House panel that it was very “troubling” to negotiate commitments with industry to justify fees and then see some of the money going “into a bank” and not available to support FDA programs and activities. If these cuts continue, she stated, “it will have an impact.”

Such reforms are underway in countries far and wide to build real-world evidence on safety and efficacy of new medicines, mainly by way of comparative effectiveness studies against current standards of care. These policy initiatives align with the quandary that cancer physicians face in providing adequate care while faced with the reality of high drug prices for patients. This predicament has recently spawned a constituency of prominent oncologists actively seeking dialogue with drug companies to lower the price on the most expensive treatments, some of which cost over $100,000 annually.

When asked what their primary considerations are in prescribing medicines, 87% said they look at real-world evidence on product safety and effectiveness ‘all the time’ or ‘most of the time’; 94% weighed data on patient quality of life; and 65% assessed figures pointing to product availability and cost. This third consideration showed striking differences across markets, with China highest at 91% and the EU countries at only 50%, highlighting that not all markets are in lockstep in their approach to balancing cost and access.

Differences also surfaced in how oncologists see the implications of health reform on their practices. US doctors cited the highest level with Brazil at the lowest end. The survey warrants further probing to determine how stakeholder dynamics between the four Ps—physicians, payers, policymakers, and patients—will come to shape access parameters in an era of increasingly tough conditions on pricing and rationing of care.

The Food and Drug Administration has come down on the side of reducing abuse of opoid medications, over encouraging wider availability of low-cost painkiller meds. The agency decided to block generic versions of the original OxyContin formulation, which is fairly easy to manipulate by illegal users. The aim is to help halt the epidemic of prescription drug abuse raging across the country. FDA’s decision leaves the market open to Purdue Pharma’s newer version of the drug, which the agency determined has features that make it more difficult to abuse via injection or snorting.

Purdue had stopped shipping original OxyContin in 2010 when FDA approved its reformulated, safer product, and had waged a campaign to prevent generic versions of its original product, whose patent expired April 16, 2013. After much deliberation, FDA agreed with Purdue and declared on the same day that it would “not accept or approve any generic forms of the original OxyContin ER,” according to Douglas Throckmorton, deputy director of the Center for Drug Evaluation and Research. FDA also updated the labeling of “new” OxyContin to support its abuse deterrent features.

Generic drug makers and some physicians had argued that patients need access to less costly pain treatments. But the prospect of cheap, easily abused generic painkillers flooding the market aroused strong opposition from state and federal officials struggling to control illegal prescription-drug use. FDA may approve other oxycodone extended release products with abuse-resistant features, but Purdue’s new product has a patent until 2025.

FDA has asked Purdue to conduct postmarketing studies of reformulated OxyContin to evaluate further its impact on abuse. Meanwhile, the agency is working to finalize draft guidance issued in January that maps out approaches for manufacturers to develop drugs with abuse-deterrent characteristics. A number of generics firms were poised to launch new versions of old Oxy, eager to gain a bigger share of the $10 billion U.S. painkiller market. Some are likely to challenge FDA’s decisions and contest patents of the newer painkillers.

At the beginning of the Reboot Camp – held at New York City’s Alexandria Center on April 12 – Intouch Solutions’ CEO Faruk Capan declared the days of Don Draper effectively over. The route to patients’ hearts and minds isn’t Old Fashioned cocktails and intuition; it’s solutions based on patient, provider and payer needs, and making disparate data streams pool around brand objectives.

Katherine Patterson, global marketing communications manager, growth initiatives, GE Healthcare

Katherine Patterson, global marketing communications manager, growth initiatives, at GE Healthcare, gave the keynote address, which focused on clarity of mission in marketing execution, and the importance of marrying science and emotion for consumers. Marketers too obsessed with social media, or the newest digital platform, might impress only themselves. “It’s like peeing down your leg…hot to you, but nobody else,” said Patterson. In Japan, for example, GE Healthcare’s medical device customers “are moving back toward print” as a preferred marketing channel, although growth markets “want digital,” and they want it on their mobile devices, she said.

Citing Eric Topol, currently director of the Scripps Translational Science Institute, Ben Chodor, CEO at Happtique, said we’re not too far away from a time when physicians prescribe more apps than pharmaceutical drugs. Chodor is betting on Topol’s prediction; Happtique, a mobile health application store, will “curate” mobile apps for docs through a private, customized dashboard of Happtique-certified health apps. The company’s patent-pending software would allow physicians to electronically prescribe apps to patients. Chodor says he’s lobbying the SEC to reimburse medical apps, noting that some private plans already do.

Happtique doesn’t make apps itself, but Chodor appeared before the US House of Representatives’ Energy and Commerce Subcommittee on Communications and Technology in March to support FDA’s regulation and definition of mobile medical apps. “It’s relatively simple to take an app through FDA” [for a medical device designation], and it only costs between $10,000 and $20,000, he said, noting that 75 mobile devices/apps have already been approved. Chodor said the Affordable Care Act’s medical device excise tax – “the absolute worst tax ever” – should not be levied on smartphones or apps.

Asaf Evenhaim, co-founder and CEO of Crossix, reminded Reboot Camp attendees about the unfathomable amount of individual consumer or patient data that exists for marketers, while insisting on the importance of privacy and HIPAA regulations. His company collects this data to create “propensity scores,” which serve as the basis for highly specific predictive models. The models can then be used to predict healthcare purchase decisions.

Where does all that data come from? Some of it is volunteered, some is collected invisibly through cookies, Facebook and other online aggregators, and some of it – but not Crossix’s data – is gleaned from trolling social media channels and blogs. Passive data collection, said Intouch Solutions’ senior vice president David Windhausen, is revolutionizing pharma marketing and health itself. Windhausen said he looks at his Nike FuelBand in the evening, and if he hasn’t been active enough, it’s time to exercise.

Windhausen’s talk lovingly described the Sanofi mobile app “GoMeals,” an app for diabetics specifically, but also for anyone who wants on-the-go nutritional facts about nearby restaurants (among other things). An attendee representing Sanofi – which is an Intouch client – let slip that GoMeals, and possibly the iBGStar glucose meter, would start to integrate passive data from wearable tracker gadgets like Fitbit or the FuelBand as early as this year.

Capping off the Reboot meeting was Augustin Fou, founder and chief digital strategist, Marketing Science Consulting Group. Fou emphasized the importance of recognizing how patients’ habits, expectations, and actions – in the context of healthcare – have changed, and how they continue to change. He referenced a Capgemini Consulting report on “digital maturity” that placed pharma at the very bottom of the list.

Despite regulatory hurdles and because of an explosion in mobile technology, data capture, and the influence patient’s have on the delivery of healthcare, pharma marketers could use a reboot. But they’ll need to back-up some of the dusty old tropes of yesteryear, even those that precede Don Draper. As GE Healthcare’s Patterson noted, Aristotelian rhetoric, comprised of ethos, pathos and logos – in equal measure – works as well in a sales detail as it did in symposia. The occasional Old Fashioned might be okay, too.

While provinces in Canada select drugs for reimbursement, the PMPRB establishes the economic benchmark value of medicines once they enter the market. The NPDUIS serves to add an extra layer of analysis to help the Board keep up with trends in where the private sector is investing its development dollars. “The purpose is partly general information, partly to inform payers of what’s coming up. In a few years, these will be the drugs facing review for reimbursement. So for public payers, it can be used as a planning tool, “explains Bernard Lachapelle, President of The JBL Group.

The NPDUIS takes clear aim at novel high cost targets. 37 of the 135 drugs screened in its report are biologics. This compares with no biologics reported in the last installment, in 2011. Biologics, as well as drugs in therapeutic categories with high utilization rates(such as cardiovascular) and areas where cost of medicines are particularly high ( i.e. cancer) were carefully scrutinized in comparison with other medicines, as these are all drugs that can significantly affect drug plans and drive costs.

Of seven drugs mentioned since the last report that have been granted marketing rights by Health Canada, five of them have retained prices within guidelines set by the PMPRB; the drug Pirfenidone is subject to investigation; and one drug had yet to be sold as of March. All the compounds considered in the NPDUIS review are at the later stage Phase III in clinical trials. Other criteria set by the reviewers include drugs that can be used to treat life-threatening conditions, rare diseases and other areas of unmet need, or if they could potentially change clinical practice in a therapeutic area, such as medicines with novel mechanisms of action or new indications. Above all, the drugs must demonstrate one of the following: improved efficacy versus existing drugs, impacts on patient health such as increased life-expectancy or quality of life; new or redefined outcomes; or an improved safety profile.

But while PMPRB and NPDUIS have managed to aggregate these promising late-phase drugs and define how they can change therapeutic landscapes within Canada, Lachapelle points out the report renders no judgment around the cost concerns of the country’s provinces, which ultimately boil down to the question: “What are the long-term budgetary impacts of the introduction of those drugs? All the report talks about is efficacy and safety, so beyond the regulatory standpoint people are left to draw their own conclusions.” The new report suggests the federal government has the expertise to help render some basic conclusions about where the provinces might efficiently spend tax dollars on medicines provided to the public through subsidized benefit programs.  Whether the provinces are interested in applying this expertise – and thus institutionalizing a bigger federal oversight role in drug spending – remains to be seen.

There seems no end to demands for data on clinical research, conflicts of interest, company payments, and drug prices.

Although recent legislation and regulations have greatly expanded the range of information that pharmaceutical companies have to unveil to the public, there’s an escalating demand for even more transparency.

The new “Sunshine” law — requiring drug and medical device companies to report virtually every penny they transfer to physicians and teaching hospitals, whether for conducting research, consulting, or providing free lunches — is just the tip of the iceberg.

The theory is that disclosure of financial relationships between manufacturers and prescribers will shed light on medical treatment decisions — particularly for new, more costly medicines versus older, cheaper treatments.

There’s also a broader clamor for transparency in clinical trial activities and study results. After years of reluctance, most pharma companies now post information on active clinical trials on the federal clinicaltrials.gov website. Such listings inform patients of opportunities to enroll in research, and also provide a baseline of clinical studies subject to fuller disclosure of trial result summaries after product approval. Now regulators and health advocates seek to expand disclosure to include findings on all clinical trials, even those for drugs that fail to gain market approval. Leading medical journals are working with European Union officials to promote the AllTrials effort to register and disclose results from all clinical trials around the world. Trial summaries are not enough; safety advocates and industry critics seek disclosure of patient level data and case report forms so that they can verify the sponsor’s research results and product claims.

This call for greater data transparency reflects charges that sponsors have hidden important safety information from regulators and the public. Pharma companies counter that full disclosure can raise patient privacy issues and lead to misinterpretation of findings by non-experts. Abbott’s pharma spin-off AbbVie has filed suit to prevent the European Medicines Agency from releasing patient-level clinical trial data, as has InterMune of California.

Yet, a number of pharma companies are adopting a full disclosure policy, some building on research disclosure requirements set in consent agreements negotiated with the Department of Justice and other federal and state enforcers.

In February, GlaxoSmithKline announced it would release patient-level data as part of a new “openness” policy. In addition to posting notices on new trials and result summaries, the company will make available clinical study reports for all medicines — approved and discontinued — after results are published.

Roche is taking a similar stance, partly in response to criticism over hiding clinical trial safety reports on its Tamiflu influenza treatment. Roche has formed an independent body to assess outside requests for patient data from trials supporting market applications and will make such information available after product approval in the United States and Europe.

Price transparency
An equally important goal of US transparency advocates is to reduce healthcare spending through competition generated by broader disclosure of prices for healthcare services and medical products. The new online “marketplaces” established by Obamacare for consumers to shop for health insurance will feature comparative information on plan premiums, co-pays, and benefits, along with drug formularies and pharmacy coverage policies, to help identify the best deal for an individual on coverage and costs.

Disclosure of information on drug coverage and costs has gained support from a steady supply of reports on pharma pricing issues from federal investigators. One analysis issued in February by the HHS Inspector General found millions in overpayments for drugs covered by Medicare Part B under the current average sales prices reimbursement formula. Another study criticized inadequate conflict-of-interest assessment for members of Medicare drug plan formulary committees, a factor that supposedly could bias committee judgment in drug selection decisions. The Government Accountability Office recently investigated and called for changes in how Medicare pays for drugs used in dialysis treatment.

Consumer advocates and pharma critics maintain that full disclosure of drug prices will lead to much lower costs for patients. Pharma companies counter that such transparency will only boost prices overall, especially for those customers that currently enjoy favorable rebates and discounts. Industry’s biggest fear is that some kind of national formulary will lead to reference pricing, higher rebates, and eventually drug price controls.

Social media exposure
Over the long run, though, much information on pharma research and prices will become public with the expansion of global search engines able to tap into millions of queries and postings on medical treatments and healthcare costs. A recent study by scientists at Microsoft Research, Stanford, and Columbia University, published in the Journal of the American Medical Informatics Association (March 6, 2013), found that Internet searches on drug use uncovered previously unrecognized adverse events. Here, queries from six million people in 2010 searching for information on antidepressant Paxil and cholesterol treatment Pravachol disclosed a greater incidence of high blood sugar in patients taking the two drugs.

It’s not hard to imagine similar analyses of consumer searches for lower drug prices, product safety reports, and complaints about pharma marketing and advertising from health professionals and the public.

The ultimate question is whether such disclosure enhances patient care — or adds to the complexities of innovative research.

Jill Wechsler is Pharm Exec’s Washington correspondent. She can be reached at jwechsler@advanstar.com

If the generic drugs come to market sooner than originally planned, what exactly is the FTC so worried about? The issue for the FTC is not related to that simple fact, but to the multiple agreements that a branded company may bring to the negotiating table in seeking just one outcome… to make the first generic enter as late as possible.

Both brand and generic company alike go into the settlement room having assessed the risk of losing or winning the infringement case, and this risk is weighed on either side in determining when the generic can enter the market. For example, if two parties at present think they have a 50% chance of winning the case, and the patent for the branded medicine expires in 2021, then it is most likely that they will settle on an entry date for the generic halfway between now and then, in this case four years from now, in 2017.

What the branded company often does is it will introduce one or more of the following agreements: a supply agreement where the brand company agrees to pay the generics company to supply an active pharmaceutical ingredient (API) to them, a co-promote agreement where the generic agrees to help the brand to co-promote their product in exchange for payment, an agreement where the brand promises not to market its own authorized generic in direct competition with first-filer generic during its 180 day exclusivity period (where no other generic may enter the market), or an innovation agreement where both companies agree to work together to create an entirely new product.

All of these agreements, along with the most obvious one of an outright payment from the brand to the generic company are construed as weakening the generic party’s resolve to enter the market as soon as possible, commensurate with its assessment of litigation risk. These settlement terms, also known as “transfers of value” are quid pro quo for a later entry date, according to the FTC.

“The rationale here is that the generic company, which wants to sell its version of the branded drug as soon as it can to start earning revenues, will be accommodated and maybe less interested or less severe on the argument that it needs to get in as soon as possible if it’s receiving revenue from some other source,” says Jeffrey W. Brennan, partner at McDermott Will & Emery LLP. If the original argument is to push for a generic entry date (as in the example above) of 2017, suddenly they may not push as hard for four years from the time of negotiation; they may think of waiting five years, if they are getting this alternate source of revenue.

Nevertheless, the argument on the other side is something of a no-brainer: in every case, the generics get to market quicker than the patent exclusivity for the brand expires, and that is ultimately pro-consumer. Moreover, while these settlements between branded and generic companies are a cost of doing business within a questionable regulatory framework, the prospect of settling without exorbitant litigation leaves businesses and the courts alike happy with the absence of a lengthy trial.

As debate sizzles and the court’s decision coming to pasture in June, many pundits have begun to weigh in on how the issue of pay-for-delay settlements will be decided. When asked as to the SC’s final ruling on the case, M. Miller Baker , another partner  at McDermott chimed, “I don’t expect the court to be starkly divided in this case—I expect seven or 8 votes, potentially all 9 votes against the FTC here, with Justice Sotomayor as the wild card.”

So, what’s your verdict?